By Rich Heidorn Jr.
NASHVILLE, Tenn. — Present and former regulators debated the costs and benefits of rooftop solar and the pros and cons of net metering in a spirited discussion at the National Association of Regulatory Utility Commissioners summer conference last week.
Charles Cicchetti, former chair of the Wisconsin Public Service Commission, and former Ohio Public Utilities Commissioner Ashley Brown led off the debate.
Cicchetti, a member of Pacific Economics Group and former economics professor at the University of Southern California, said regulators’ moves to curtail or reduce net metering payments and introduce new demand charges “greatly cut into the benefits that customers who installed rooftop solar expect to earn and use to pay for those systems.”
Cicchetti said regulators should require “vetted … neutral studies” to determine the costs imposed by solar customers and compare them with the benefits they provide.
“When you do that you’ll probably come away with the conclusion that, if anything, the extra costs that are being imposed by rooftop solar [are] far less than the extra benefits both in utility savings and societal benefits,” he said.
He said that time-of-use tariffs are more fair than demand changes, which he called “a blunt instrument.”
“If [rooftop solar customers] take electricity during expensive times, they should pay more. But they should also save more when they reduce electricity — as most of them do — during the time that those systems are operating.”
Brown, of the Harvard Electricity Policy Group, disagreed, saying solar customers under net metering are not paying their fair share of the system’s fixed costs.
The value of solar studies is incredibly subjective, Brown said. “Many states have done them; many interest groups have had them done and the findings are all over the map,” with some finding the value of solar is double the retail price and others finding a negative value. “Neither of those cases could possibly be true.
“Several things are always missing from these studies,” Brown continued. “One is, every single one of these values can be obtained from other sources. So why aren’t we disciplining the price we pay for those values by putting it into a marketplace with other sources? And many of these values are provided by other forms of generation who aren’t compensated for it because we don’t pay anybody based on value. We pay them based on market or we pay them based on cost.”
Nevada Public Utilities Commissioner David Noble spoke about the state’s bruising net metering battle last year, when the PUC conducted a ratemaking in response to a legislative mandate that rooftop solar result in “no unreasonable cost shifts.”
Noble said the commission was vilified by solar energy providers even though it rejected demand charges, implemented optional time-of-use rates and ordered a phase-in of “value-based” rates for excess energy.
“The rooftop solar companies decided to take an approach … that there should be no change from retail rates,” he said. “When you take an all-or-nothing approach, there’s a possibility that you’re going to lose. And that’s exactly what happened because they put on an inferior case.
“The CEO of SolarCity was claiming that he literally had a gun to his head and the commission was in the back pocket of” NV Energy, he said.
Solar companies bused hundreds of protesters to PUC headquarters, some of them exercising their open-carry rights to travel with guns, Noble said. There they attempted to alarm consumers by claiming utility rates would increase by 3% annually for the next 20 years.
“We haven’t had 3% increases year-over-year for any longer than three years,” he said. “In fact, over the last six years … rates have been flat in southern Nevada and they’ve gone down 20% in northern Nevada.”
Beverly Heydinger, chair of the Minnesota Public Utilities Commission, said the focus on net metering and rooftop solar is myopic, and that policymakers should also consider storage, electric vehicles and other emerging technologies.
“We’re not planning for today. We’re trying to develop a flexible enough template that we can use it and adapt as the times are changing,” she said.